Massive ₹8,000 Crore Fake GST Firm Scam in Pune Uncovered: Key Accused Behind Bars - Read Now

DGGI Pune unearthed a ₹8,000 crore fake GST firm scam involving 246 fake firms linked to an auto driver’s name. The scam led by Ashrafbhai Kalavadiya and accomplices used fraudulent GST accounts to evade taxes across states.

By Aayushi Dubey Oct 27, 2024, 11:09 IST

In a major crackdown, the Pune officials of the Directorate of GST Intelligence have unearthed an ₹8,000 crore fake GST firm scam, which has connections with a company registered under the name of an unsuspecting auto-rickshaw driver in the city. The scam, allegedly masterminded by Ashrafbhai Ibrahimbhai Kalavadiya, includes 246 fake GST firms through which siphoning off billions in taxes was made from fake GST transactions.

The Accused and His Method

Kalavadiya, who hails from Surat, Gujarat State, has been observed to have filed several dummy GST firms, one of them being the notorious 'Pathan Enterprises' fraudulently mentioned at a Bhavnagar, Gujarat auto driver address. The DGGI Pune Team, led by the officer Rushi Prakash, while probing Pathan Enterprises fraudulently listed at a location on the Pune Solapur Highway discovered this suspicious transaction.

It further reveals that Kalavadiya and his group controlled such bogus units through handling bank accounts developed based on bogus KYC documents and indulging in unauthentic GST transactions. Involved individuals are Nitin Barge, Faizal Mevalal, and Nizamuddin Khan, who handled bank accounts, purchased sim cards, and cash management of those bogus units.

DGGI Seizures and Arrests

Officials of DGGI arrested Kalavadiya in a raid at a hotel in Mira Bhayandar on March 12, 2024. During the searches, they recovered mobile phones, laptops, bank cards, and rubber stamps used for the preparation of such fictitious firms, said DGGI. It claimed that Kalavadiya had got false GST accounts and sim cards to raise fictitious GST invoices while himself being out of the ambit of legitimate transactions and tax payments.
Impact of ₹8,000 Crore Scam and Ongoing Investigation

It has been found that ₹8,000 crore of tax evasion by Kalavadiya's operation occurred from 2018 to 2024. Kalavadiya and his team cheated the government through false billing, which is going to have a devastating effect on India's GST structure. Kalavadiya is already in judicial custody. Investigations are being conducted to gather the facts of this scam and other evidences also be brought to justice.

It makes the vulnerability of India's GST system very apparent and shows a critical aspect whereby stronger compliance must be implemented strictly against fraudulent activities and tax payer's security.

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